Norway's 2017 high-yield bond volumes recover as shipping bounces back (updated)

Fjord Defence ASA

04/10/2017 06:29

* New issues of NOK 45 billion so far in 2017 
    * High-yield shipping bonds of about NOK 16 billion 
 
 (Adds quotes, detail) 
    By Henrik Stolen 
    OSLO, Oct 4 (Reuters) - Companies raised 45 billion 
Norwegian crowns ($5.63 billion) via high-yield bonds in Norway 
from January to September, more than twice the full-year 2016 
level, data from brokers DNB and financial service Stamdata 
showed on Wednesday. 
    Oslo's corporate bond market, a vital source of cash to many 
mid-size shipping and oil services firms both in Norway and 
overseas, has rebounded after nearly drying up last year when a 
series of debt restructurings drove high-yield investors away. 
    "We're closing in on previous highs in terms of issued 
volumes. There is more diversification than before, but shipping 
is a segment that has seen substantial growth," DNB Markets 
credit analyst Magnus Vie Sundal told Reuters. 
    Overall volumes in 2017 could eventually amount to between 
55 billion and 60 billion crowns, he added, far above the 21.6 
billion seen in 2016 and just below the record 65 billion crowns 
raised each year from high-yield bonds in 2013 and 2014. 
    Of the 2017 numbers so far, the shipping industry accounted 
for about 16 billion crowns of the issued amount, DNB Markets 
estimated, about four times as much as in all of 2016. 
    Shipping firm Wallenius Wilhelmsen Logistics (WWL)  WWLO.OL  
was among the latest to take advantage of strong high-yield 
investor interest, raising one billion Norwegian crowns in 
unsecured debt on Sept. 28. 
    "It's a really strong bond market. The timing is good and we 
have a bond maturing in June 2018. We'll use this to refinance," 
WWL corporate finance head Bjoernar Bukholm told Reuters. 
    Dry bulk shipper Songa Bulk  SBULK.OL , which recently 
completed an $18 million tap issue of a callable bond, meanwhile 
said it was "very pleased" with the response it received from 
the bond market. 
    "The net proceeds from the tap issue will let us continue to 
grow the fleet in line with our strategy," Songa Chairman Arne 
Blystad told Reuters. 
    Facing tougher capital requirements from regulators, Nordic 
commercial banks have pulled back from lending to many corporate 
clients, analysts said. 
    "Some of these (firms) operate in sectors where it's become 
more challenging to raise standard bank debt. Still, these are 
companies in which credit investors are more than comfortable to 
invest," Nordea Markets chief credit analyst Oeyvind Hagen said. 
    ($1 = 7.9949 Norwegian crowns) 
 
 (Reporting by Henrik Stolen; Editing by Terje Solsvik) 
 ((henrik.stolen@thomsonreuters.com; +47 952 79 474; Reuters 
Messaging: henrik.stolen.thomsonreuters.com@reuters.net)) 
 
Keywords: NORWAY HIGHYIELD/